(RTCC) – A UN piggy bank to help poor countries deal with climate change partnered with a leading coal funder on Thursday, sparking an outcry from green groups.

At a meeting in its South Korean headquarters, the Green Climate Fund approved Deutsche Bank and 12 other financial entities to receive and distribute cash.

Germany’s leading investment bank is the world’s tenth largest backer of coal, with €15 billion invested in the industry from 2005 to 2014, according to the BankTrack network.

Over 20 campaign groups said they were “tremendously discouraged and disappointed” in a joint statement, adding that the fund was at “real risk of losing credibility”.

They argued Deutsche Bank’s support for coal was at odds with the green fund’s carbon-cutting objectives. And raised concerns over its ”very poor” record on human rights monitoring and failure to crack down on money laundering.

Brandon Wu, senior policy analyst at ActionAid USA and one of two civil society “active observers” on the GCF Board, was one of the signatories of the statement.

He said: “The Green Climate Fund is supposed to be a fund for climate action in developing countries, with a particular focus on the poorest and most vulnerable.

“For it to partner with one of the largest private-sector coal financiers in the world – and one embroiled in multiple scandals around market manipulation and money laundering – is so far from this vision and mandate that it boggles the mind.” [more]

(RTCC) – The Green Climate Fund has not ruled out backing coal plants after a protracted three-day board meeting in Songdo, South Korea.

Tense negotiations ended at 0420 on Thursday with agreement on seven intermediaries to disburse funds for low carbon development and climate adaptation in poor countries.

That has paved the way for the first funding proposals to be considered “very soon”, according to board co-chair Henrik Harboe.

The fund expects to allocate resources before this December’s climate summit in Paris, where a global deal is due to be signed.

Yet the US$10.2 billion pledged by donor governments has been slow to materialise, with only 1% contributed a month before the 30 April deadline.And civil society observers left disappointed at a lack of progress on key rules that will determine how the money is spent. [more]

As representatives of development, environment and social justice organizations engaged with the Board of the Green Climate Fund (GCF) in Songdo, South Korea, we are tremendously discouraged and disappointed by today’s decision of the Board to accredit Deutsche Bank to receive and distribute GCF funds.

Deutsche Bank is one of the world’s largest financiers of coal. It has been criticized for its very poor record on human rights monitoring, was awarded the "Black Planet Award" for environmentally destructive business policies, and recently received a record fine for market manipulation and obstructing regulators. The GCF claims zero tolerance towards money-laundering, but has accredited Deutsche Bank despite the fact that two national regulators have this year fined it for the poor state of its anti-money-laundering governance.

The World Bank was also accredited by the GCF, despite its top-down, donor-driven nature that flies in the face of the GCF’s mandate to be more directly responsive to developing country and community needs – not to mention its poor track record on climate finance and concerns around human rights. Two other multilateral development banks with similar records, the European Bank for Reconstruction and Development (EBRD) and the Inter-American Development Bank (IDB), were likewise accredited.

Civil society has pushed for the creation of the Fund since the beginning, seeing it as an opportunity to break from bad existing practices and shift towards a model that is more responsive to the needs of vulnerable countries and communities, adopting a gender-sensitive approach and supporting a real paradigm shift to low-carbon, climate-resilient societies. By rushing the accreditation of large international private entities like Deutsche Bank through a non-transparent process, the Fund is at a real risk of losing credibility.

This is an outcome none of us want. We want the Green Climate Fund to succeed. But for it to do so, it needs to change direction away from accrediting controversial big banks that are heavily invested in fossil fuels and thus actually exacerbating climate change. If the GCF continues in such a direction, this would reinforce our fears that in the near future we may have to protest an institution we have thus far been supportive of and integral to creating.

The issues here go deeper than the individual entities mentioned. We are concerned that the GCF is becoming ever-more like the multilateral development banks and international private banks that it was meant to provide an alternative to.

The GCF decided to outsource the management of its programmes and projects to other institutions (“entities”), originally with the idea of making decisions more responsive to the needs of the countries and communities most affected by climate change. But the accreditation of many of the first 20 of these entities, and the process leading to their accreditation, tells a different story.

The Board chose to approve all 13 applicants presented for accreditation at the current GCF meeting in a single bloc, accrediting groups of entities in one go. This encouraged political horse-trading between Board members over which applicants get approved, leading to tit-for-tat approval of applicants despite very serious reservations. Some Board members raised concerns about Deutsche Bank, while other concerns were raised about the ability of the newly accredited CAF (Development Bank of Latin America) and the public-private African Finance Corporation to conduct due diligence on the highest risk (category A) projects.

Information presented to the Board by the Accreditation Panel was often partial and one-sided, with no substantial assessment of the track record of the institutions concerned, and reliance on official sources that are long on glowing praise and short on critical information about shortcomings and controversies. Civil society groups are not allowed to know the names of the applicants in advance of their approval. This makes it impossible to provide input on the track records of applicants, despite civil society’s in-depth, on the ground experience of the work of these institutions.

Signatories

ActionAid InternationalActionAid USAAsian Peoples Movement on Debt and Development Center for International Environmental Law (CIEL)Consumers Association of Penang, MalaysiaFriends of the Earth England, Wales and Northern Ireland (EWNI)Friends of the Earth MalaysiaFriends of the Earth USGermanwatchGlobal Alliance for Incinerator Alternatives (GAIA)Heinrich Böll StiftungInstitute for Climate and Sustainable Cities (iCSC)Institute for Policy Studies – Climate Policy ProgramInteramerican Association for Environmental Defense (AIDA) Oil Change International Pan-African Climate Justice AllianceSawit Watch IndonesiaTebtebba FoundationThe Development InstituteThird World NetworkWomen’s Environment and Development Organization (WEDO)